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What do you do if you have a grievance?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Deepika Gill
Advocate

If you have a complaint against only scheduled bank on any of the above grounds, you can lodge a complaint with the bank concerned in writing in a specific complaint register provided at the branches as per the recommendation of the Goiporia Committee or on a sheet of paper. Ask for a receipt of your complaint. The details of the official receiving your complaint may be specifically sought. If the bank fails to respond within 30 days, you can lodge a complaint with the Banking Ombudsman. (Please note that complaints pending in any other judicial forum will not be entertained by the Banking Ombudsman). No fee is levied by the office of the Banking Ombudsman for resolving the customer’s complaint. A unique complaint identification number will be given to you for tracking purpose.

Complaints are to be addressed to the Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located. Complaints can be lodged simply by writing on a plain paper or online at www.bankingombudsman.rbi.org.in or by sending an email to the Banking Ombudsman. Complaint forms are available at all bank branches also.

Complaint can also be lodged by your authorised representative (other than a lawyer) or by a consumer association / forum acting on your behalf.

If you are not happy with the decision of the Banking Ombudsman, you can appeal to the Appellate Authority in the Reserve Bank of India.

What are the minimum standards that banks are required to follow when they sell you a home loan?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Tushar Bhargava
Advocate
  1. At the time of sourcing the loan, banks are required to provide information about the interest rate applicable, the fees / charges and any other matter which affects your interest and the same are usually furnished in the product brochure of the banks. Complete transparency is mandatory.
  2. The banks will supply you authenticated copies of all the loan documents executed by you at their cost along with a copy each of all enclosures quoted in the loan document on request.

A bank cannot reject your loan application without furnishing valid reason(s) for the same.

Do you get a tax benefit on the loan?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Vishal Kumar Thakur
Advocate

Yes. Resident Indians are eligible for certain tax benefits on both principal and interest components of a loan under the Income Tax Act, 1961. Under the current laws, you are entitled to an income tax rebate for interest repayment up to Rs. 1,50,000 /- per annum. Moreover, you can get added tax benefits under Section 80 C on repayment of principal amount up to Rs. 1,00,000 /- per annum.

What are Switch over charges/ balances transfer charges?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Prateek Kumar
Advocate

When other banks reduce the interest rate, you may prefer to close your account with the bank with whom you are banking, to avail of the loan from the bank offering reduced rates of interest. You have to pay pre-payment charges for doing so. In order to ensure that their customers do not approach other banks for availing reduced interest rates, banks allow customers to switch over from a higher interest loan to a lower interest loan by paying a switch over fees which is lesser than the pre-payment charges. Generally switchover fee is taken as percentage of the outstanding loan amount.

Keep up-dating yourself on various changes in the home loan market. Visit the branch, discuss with the officials to get the best out of any changes in the home loan scenario.

Can you repay your loan ahead of schedule? Is pre-payment of loan allowed?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Soumya
Advocate

Yes, most banks allow you to repay the loan ahead of schedule by making lump sum payments. However, many banks charge early repayment penalties up to 2-3% of the principal amount outstanding. Prepayment penalty may vary according to the reasons and source of funds - if you obtain a loan from another bank for pre-payment the charges are usually higher than when you pay from your own sources. However, you may credit more than your EMI amount into your loan account on a periodic basis and bring down your interest burden as and when funds are available with you. Most banks do not charge a pre-payment penalty if you deposit more than your EMI payable on a periodic basis. Please check such stipulations while availing the loan.

What should be your strategy in dealing with the banks?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Tanushree Sharma
Advocate

Give yourself comfortable time. Do not hurry your purchase or loan in any case. Shopping around for a home loan will help you to get the best financing deal. Shopping, comparing, seeking clarification and negotiating with banks may save you thousands of rupees.

a) Obtain information from several banks

Home loans are available from mainly two types of lenders--commercial banks and housing finance companies. Different lenders may quote you different rates of interest and other terms and conditions, so you should contact several lenders to make sure you’re getting the best value for money.

Find out how much of a down payment you are required to pay, and find out all the costs involved in the loan (including processing fees, administrative charges and prepayment charges levied by banks). Knowing just the amount of the EMI or the interest rate is not good enough. Similarly, ask for information on loan amount, loan term, and type of loan (fixed or floating) so that you can compare the information and take an informed decision.

The following is some important information that you will require.

i) Rates

Ask your lender about its current home loan interest rates and whether the rate is fixed or floating.  Remember that when interest rates in the economy go up so does the floating rates and hence the monthly re-payment.

If the rate quoted is a floating rate, ask how your rate and loan payment will vary, including the extent to which your loan payment will be reduced when rates go down by a certain percentage. Ask your lender to what index your floating home loan is referenced / linked and the periodicity of updation of that index. Also ask your bank whether the index is internal or external and how and where it is published.

Ask about the loan’s annual percentage rates (APR). The APR takes into account not only the interest rate but also fees and certain other charges that you may be required to pay, expressed as a yearly rate. Banks are obliged to reveal the APR if requested for by the customer.

ii) Reset Clause

Check the reset clause, especially in the case of fixed interest rate loan as the rates will not be fixed throughout the tenure of the loan.

iii) Spread/Mark up

Check if the margin in the case of the floating rate is fixed or variable. The rate of interest you have to pay will vary accordingly.

iv) Fees

A home loan often requires payment of various fees, such as loan origination or processing charges, administrative charges, documentation, late payment, changing the loan tenure, switching to different loan package during the loan tenure, restructuring of loan, changing from fixed to floating interest rate loan and vice versa, legal fee, technical inspection fee, recurring annual service fee, document retrieval charges and pre-payment charges, if you want to prepay the loan. Every lender should be able to give you an estimate of its fees. Many of these fees are negotiable / can be waived also.

Ask what each fee includes. Sometimes several components are lumped into one fee. Ask for an explanation of any fee you do not understand. Also, remember that most of these fees are perhaps negotiable! Do negotiate with your bank before agreeing to a particular fee. See how the all inclusive rate compares with the all inclusive rates offered by other banks. While planning your finances, don't forget to include the costs of stamp duty and registration.

v) Down Payments / Margin

Some lenders require 20/30 percent of the home’s purchase price as a down payment from you. However, many lenders also offer loans that require less than 20/30 percent down payment, sometimes as little as 5 percent .Ask about the lender’s requirements for a down payment and also negotiate with him to reduce the down payments.

b) Obtain the best deal

Once you know what each bank has to offer in terms of rates, fees and down payments, negotiate for the best deal. Ask the lender to write down all the costs associated with the loan. Then ask if the bank will waive or reduce one or more of its fees or agree to a lower rate. Do make sure that the bank is not agreeing to lower one fee while raising another or to lower the rate while raising the fees. Ask for clarification in case you do not understand any particular term. All banks are obliged to explain the most important terms and conditions of the home loan in detail.

Once you are satisfied with the terms you have negotiated, please do obtain a written offer letter from the lender and keep a copy with you. Read the offer letter carefully before signing.

What precautions do you need to take if you are purchasing a property that is not a newly built one?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Harshit Bhurani
Advocate

Ensure that the documents being provided to you are not colour photocopies. Check the internet for other modus operandi to fraud and ensure clear title to the asset. Seek advice only from authentic sources such as your bank.

Get the no encumbrance certificate to find the true title holder and if it is mortgaged to any financier. Obtain all tax papers to ensure that all documents are up to date.

What security will you have to provide?

Posted 17 hours ago  |    1 Answer  |    0  |  Banking

Ravindra Purohit
Advocate

The security for a housing loan is typically a first mortgage of the property, normally by way of deposit of title deeds. Banks also sometimes ask for other collateral security as may be necessary. Some banks insist on margin / down payment (borrowers contribution to the creation of an asset) to be maintained / made also.

Collateral security assigned to your bank could be life insurance policies, the surrender value of which is set at a certain percentage to the loan amount, guarantees from solvent guarantors, pledge of shares/ securities and investments like KVP/ NSC etc. that are acceptable to your banker. Banks would also require you to ensure that the title to the property is free from any encumbrance. (i.e., there should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely).

What Arts of the Constitutions confer right to freedom of religion?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Ravindra Purohit
Advocate

 Arts 25 to 28 confer right to freedom of religion on the citizens.

“India is a Secular State”. What does it mean?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Harshit Bhurani
Advocate

 Indian secularism means that the state does not have any established religion, that people are free to practice and profess any religion and that the state does not show any preference to any religion.

What categories of people can be imprisoned without trial?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Soumya
Advocate

 Under Arts 22 (3) of the constitution enemy aliens and persons arrested under preventive detention Acts can be imprisoned without trial.

How the Indian Constitution seeks to protect children against exploitation?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Tanushree Sharma
Advocate

 Arts 24 of the constitution forbids employment of children in factories, mines, or in hazardous works.

Are the conferment of honour like Bharat Ratna or Padma Bibhusun violative of right to equality under Art. 114?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Soumya
Advocate

No, because Bharat Ratna, Padma Bibhusun etc. are not considered as titles. They cannot be used before or after the names of the persons on whom they are conferred.

Is the right to work and employment recognized by Constitution?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Prateek Kumar
Advocate

No. The directive principle of the constitution declares right to work and employment as desirable. But the directives are non- justiciable in character.

What Art of the Constitution forbids use of titles or honor conferred by foreign states?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Vishal Kumar Thakur
Advocate

article 18

What are the freedoms granted to citizens by Art 19 of the Constitution?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Tushar Bhargava
Advocate

Art 19 of the constitution grants six freedoms to the citizens They are right to freedom of –

(I) expression, (2) to assemble peaceably and without arms (3) to form association, (4) to move freely in India, (5) to five anywhere in India and (6) to adopt any profession or business.

What is meant by equality in the eye of law?

Posted 17 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Ravindra Purohit
Advocate

Equality in the eye of law as provided by Art. 14 of the constitution mean that nobody is above the law. Law applies to all persons equally.

How many categories of fundamental rights of citizens has been recognized by the Indian Constitution?

Posted 18 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Legistify
Advocate

 Originally the constitution conferred on the Indian citizens seven fundamental rights. They are (a) right to equality (b) right to freedom (c) right against exploitation (d) right to religious freedom. (e) right to education and culture (f) right to property and (g) right to constitutional remedies:. At present there are six fundamental rights. Right to private property has been removed from the list of fundamental rights by the 44th amendment of the constitution.

What are the provisions of the Indian Constitution regarding integration or creation of new states?

Posted 18 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Ravindra Purohit
Advocate

 The Indian Parliament by Acts passed that it can integrate new states into India or can create new states out of the territory of an existing state or states.

Into how many categories are the Indian citizens divided??

Posted 18 hours ago  |    1 Answer  |    0  |  Constitutional Matters

Legistify
Advocate

Indian citizens are divided into two categories—citizens by birth and citizens by adoption.

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